Nevsun accused of using forced labour at Eritrea mine

Canadian miner Nevsun Resources Ltd. is facing explosive allegations that it unwittingly allowed forced labour to be involved in building its flagship copper-gold mine.

The allegations will be released next week in a report from Human Rights Watch, a non-governmental organization. But on Friday, Nevsun chief executive Cliff Davis tried to dismiss concerns the company is not doing enough to keep its Eritrea-based Bisha mine free of conscripted workers.

“I’m very comfortable there are not any conscripted workers on site,” he said in an interview.

However, he could not say for certain that there was no forced labour at the project in 2009, when the concerns first surfaced. He acknowledged that the company should have taken more steps to make sure there wasn’t any, and expressed regret if there were conscripts.

“With hindsight, it’s fair to say that perhaps we didn’t do enough at the very beginning,” he said.

When Vancouver-based Nevsun initiated construction of Bisha in late 2008, the government ordered the miner to enlist a state-controlled contractor called Segen Construction for some of the work. Eritrea is a fierce dictatorship, and Nevsun had no choice but to comply.

By early 2009, there were concerns that at least some of Segen’s work force was made up of forced labourers from the government’s national service. They allegedly worked extremely long hours and had to live in unsanitary conditions for minimal pay.   

Once the allegations surfaced, Mr. Davis said that Nevsun got a written guarantee from Segen that it would not use forced labour on site, and it began examining documentation from all of Segen’s employees in early 2009.

The Bisha mine entered production in early 2011. Last year, Nevsun tried to do some additional construction work without Segen. The Eritrean government intervened and forced the company to re-hire Segen as a contractor.

Some activists are still concerned the company is not doing enough to ensure there is no forced labour at the site. Nevsun has not visited the camp where Segen’s workers live and does not know how much they are paid, Mr. Davis said.

The Nevsun situation highlights the extreme risks and challenges that Canadian miners are facing when they work in autocratic countries, particularly those with no history of large-scale mining. Eritrea is facing numerous sanctions from the international community for supporting militants in Somalia.

Mr. Davis maintains that Nevsun’s investment is a major positive for the country. “We’re not the state. We’re contributing huge value to thousands of people in Eritrea,” he said.

Bisha is Eritrea’s first large-scale mine, but other mining companies are active in the country on earlier-stage projects. They will also have to deal with Segen and the forced labour concerns if they reach the construction phase.

“As we get closer to construction, it’s something we’ll have to pay close attention to,” said Greg Davis, vice-president of business development at Sunridge Gold Corp., which controls the Asmara project in Eritrea.

(Source: Financial Post)

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